Powder keg.

THE mayor of Banja Luka is almost amiable. Dozens of business cards displayed under the surface of his glass-topped desk testify to his openness toward the world's media -- in a few minutes, he will be called by a Japanese newspaper. Answering a question about the way his town has changed in three years of war, he ends on an elegiac note about the closed theaters and museums he misses. I ask if there's anything else, thinking of Banja Luka's 15 demolished mosques and one in particular: the white-stoned Ferhad Pasha, sometimes called the Bosnian Chartres. He pauses. "You know," he says, "in Yugoslavia we were also famous for sport. Handball, especially."

As Bob Dole casts around for a way to win over the Republican convention, he could do worse than remind delegates of his rock-steady approach toward the tragedy of the former Yugoslavia. On the campaign trail himself four years ago, Bill Clinton made shameless use of the issue and raised hopes among Bosnians that if elected he would protect them and their savaged country. Once he was in office, however, these assurances fell by the wayside, and it was only after exhausting all other options -- costing not just tens of thousands more lives, but the remnants of the United States's reputation in the region -- that the Administration hit upon the idea of standing up to the aggressors in this war: the Serbs. Under the terms of last November's painfully elaborate Dayton Peace Agreement, 20,000 American ground troops were committed to Bosnia in a supposed attempt to help hold the country together. Confronted since then by numerous violations by the Serbs, the White House has confined itself to a single goal: not getting tough, but getting out.

Before the conflict erupted in Bosnia - Herzegovina, Banja Luka was the republic's second city: a reasonably prosperous if charmless place whose natural economic and cultural ties were not to Sarajevo -- let alone Belgrade -- but Zagreb. (Indeed, turning on the television, one is somewhat surprised to find that the clearest programming is still broadcast by TV Croatia.) From April 1992 to September 1995, however, it served as a springboard for the Bosnian Serb Army's ultimately successful attempts to carve out the statelet now called Republika Srpska (Serb Republic) and even more notoriously as the administrative center for the wholesale ethnic cleansing -- or Resettlement of Populations and Exchange of Material Goods, as the process was officially termed -- that went with them. Today it has a gloomy, down-at-the-heel air, made worse by frequent power cuts. At night, only the glow of candles identifies the various street-stalls and cafes, creating the impression of a sprawling, outdoor Orthodox ceremony.

Home to a fifth of the Serb Republic's million-strong populations, Banja Luka thinks of itself as the rump state's rightful capital. It also basks in the reputation of being host to the liberal alternative to the Serbian Democratic Party of Bosnian Serb supremo Radovan Karadzic, which centers instead on the small mountain resort of Pale. The chatter around town among the numerous organizations charged with implementing the civilian side of the Dayton accords is how to strengthen this opposition ahead of next month's elections.

Curiously, for a body which often protests that it is only responsible for the military side of Dayton, the NATO-led Implementation Force (IFOR) has also joined in this game. In April, the headquarters of the British sector was relocated to a metal factory just outside Banja Luka, thereby becoming the only divisional HQ not based in the other of the two "entities" established at Dayton: the Federation of Bosnia - Herzegovina. If this move was intended to reassure the Bosnian Serbs of IFOR's impartiality, then it was also supposed to signal support for the Banja Luka "moderates" (most of whom are, in their own way, just as oblivious as the mayor to the horror of what has happened) in their tussle with Pale's "extremists."

Such support takes strange forms. In the darkened offices of one so-called opposition party in Banja Luka, I came across rows of neatly arranged copies of the Sunday Times, courtesy of IFOR, even though there was no one there who knew English.

There are, though, two more serious problems with this kind of approach, which go to the heart of the partial failure of IFOR's mission. In getting to know the Serbian psyche at first hand, the West's peacekeepers have become convinced that any attempt to arrest either Karadzic or General Ratko Mladic -- "Lift K & M problem," as the putative operation is known -- would result in the local population's turning nasty, making the rest of their job impossible. (No one bothers any longer to pretend that the difficulty is one of tracking suspects down, and with good reason, given that the poster issued by the War Crimes Tribunal must be the only "Wanted" notice ever to include addresses.) This applies especially to the British contingent, which seems to view sharing jokes and slivovitz with the Serbs as part of its duties. At least the Americans are not afraid to be seen as an occupying army, which is why Richard Holbrooke's recent diplomatic dance in Belgrade is all the more unfortunate. For, by having Karadzic merely sidelined rather than extradited, he saved not only Karadzic's face but that of all Bosnian Serbs -- thereby perpetuating the problem.

The second area where IFOR has failed concerns the return home of the country's more than two million refugees and displaced persons. Again, this is an objective IFOR was only authorized -- not obliged -- by Dayton to achieve. But, again, IFOR is the only organization now present in Bosnia - Herzegovina with the muscle to make it happen. As things stand, in the eight months that have elapsed since the Dayton accords were signed, the number of Bosnians forcibly resettled has actually grown rather than diminished. The most dramatic increase occurred when Bosnian Serbs evicted some 40,000 of their own kind from the suburbs of Sarajevo, prior to transferring authority over the country's capital to the Federation. Even as I was in Banja Luka, another thirty of the town's handful of remaining Muslims were driven out by Serbian mobs.

A laconic internal IFOR memo about this episode reports: "These incidents demonstrate the precarious lives that minorities lead and emphasize that an ethnically mixed population, living in harmony, is some way off." For many of those serving with IFOR, it is indeed an article of faith that reintegration of Bosnia's once tightly woven communities -- and hence of the country itself -- is something that will happen, if at all, only long after IFOR has departed.

At first glance, IFOR's view is merely pragmatic. You can't, after all, force people to live with one another, can you? What the Bosnian war in fact demonstrates is that you can all too easily force people to live apart. The images of indiscriminate shelling, burnt-out houses, and columns of refugees that as recently as 12 months ago made up the news reports had nothing to do with endemic inter-ethnic tensions resulting from Serbian (or Croatian) anxieties about their womenfolk being forced to wear veils, etc. They were the direct product of a policy of deliberate annexation initiated in one neighboring country, Serbia, and later abetted by another, Croatia, for which proxies on the ground were armed and organized. IFOR may well have done a respectable job of putting the heavier of these weapons temporarily out of reach. But only by apprehending or at least facing down the most malevolent of these local warlords who have now switched over -- or rather, back --into politics and policing can IFOR help generate the conditions to advance the primary purported goal of Dayton: the survival of Bosnia - Herzegovina as a single state.

Proof of this proposition is to be found at the other end of the country. For two years, now, the Herzegovina town of Mostar has been under European Union administration, following the crucial American-brokered agreement between Croats and Muslims which ended the bitter conflict between these former allies. Fighting in Mostar in 1993 - 94 had resulted in a front line almost exactly along the river Neretva, which cuts through the middle of the town. It had also led to the destruction of the exquisite Ottoman-era Old Bridge, which used to span this river -- and which became instead a potent symbol of division.

Today, despite the rebuilding of this and several other bridges, almost all Muslims live among the ruins of the east side of the town, and nearly all Croats on the less damaged and more modern west side. It would be idle to pretend that there is much love lost between the two communities. Indeed, many Croats here delight in telling you that the two peoples cannot possibly now live together. I was listening to this lecture -- spiced with comments about the inevitable clash between Catholicism and Islam -- from the chairman of the Mostar branch of the Croatian Democratic Union, when I noticed out of the window the headstones in yet another makeshift Muslim graveyard, the burial dates on which refuted the point he was making. For these Bosnian Muslims had been killed in the summer of 1992, when together with Croats they had saved their city from capture by surrounding Serbs.

The wedge that was afterward driven between them owed more to crude economics than to culture or religion. Unlike the gentle green slopes of Bosnia, the monumental limestone mounts of Herzegovina yield only two crops worthy of the name: grapes and tobacco. With both falling under state monopoly, locals have historically had to smuggle to survive, and it was in this tradition that Bosnia -Herzegovina came into being and exists even now, as a kind of self-licensing customs zone. A number of Croats with criminal pasts have grown extremely wealthy by these arrangements. For them, the more checkpoints, borders, tolls, taxes, and currencies the better.

Judging by the two assassination attempts against him, the retired German mayor brought in to govern Mostar in the name of the European Union has done a surprisingly good job in lowering the profit margin for these gangsters. The real test, however, for the policy of reintegration came with the local elections held at the end of June. Rightly seen as a kind of dry run for the nationwide September elections, these showed that if the correct formula of carrot and stick is applied, Bosnia still has a chance.

On the enforcement side, the EU administration built on the reasonable level of security it has managed to create over the last two years, by flooding the town with police and troops. IFOR provided 2,500 heavily armed personnel of its own, which meant that with just 97 polling stations to cover (where legions of international monitors kept a beady eye on the ballot boxes), the main danger on polling day was a collision between the various types of iron-clad vehicles that hurtled round the narrow streets of Mostar's old town.

Over-the-top as these arrangements undoubtedly appeared, they ensured that thousands of residents found the courage to cross the river and vote in the area they used to live in before the ethnic segregation. In doing so, many lingered for a while to talk with neighbors they had not seen for years, and in some cases even with those who had moved into the apartments they themselves had vacated. And yet, had the original electoral rules been adhered to -- allowing people to vote where they live now, as opposed to at the time of the 1991 population census -- there would have been no incentive to overcome these physical and psychological barriers.

Another important factor was that absentee balloting was permitted only for refugees in four Western European countries. Otherwise, residents of Mostar who had settled elsewhere had to return home to vote. Around 18,000 did so, including a few hundred Serbs (it might have been more, had Belgrade laid on more buses for the ones now living in rump Yugoslavia), thus bringing the total turn out to an impressive 60 per cent of the eligible electorate.

If this is the good news, then the bad news is that September's elections will be run along very different lines. As interpreted by the Organization for Security and Co-operation in Europe (which has a very patchy record when it comes to post-Communist democracy-building), the electoral rules allow both voting in areas where Bosnians live now and absentee balloting. In other words, a Serb resettled from, say, Sarajevo to Srebrenica will be entitled to put down roots on the site of an appalling massacre; and the Muslim who escaped with his life to Tuzla in what is now the Federation, will be able to vote as though still in his old constituency, without so much as the symbolic gesture of returning for the day to what is now the Serb Republic to give that vote at least some meaning.

The alternative would be to attempt Mostar writ large. Granted, given that we are talking about ten simultaneous elections on three different levels (local, "entity," and all-Bosnian), and given an electorate of more than three million, this would entail travel in all directions on a spectacular scale. But why not? What is IFOR's much-vaunted "freedom of movement" for, if not this? Indeed, rather than already starting to withdraw personnel, why doesn't the U.S. boost its contribution this month, and persuade its IFOR partners to extend voting over the course of a week? This would give more time for the breaking down of barriers and ease road congestion.

If this sounds like a logistical nightmare of almost surreal complexity, it could be easier and cheaper -- in the long run --than waiting for the grievances and anger accumulated over the course of the war to explode again five or ten years on. Conventional wisdom holds that patience is what's needed now to let these wounds heal, and that time is on Bosnia's side. This is wishful thinking. Unless the most is made of IFOR's presence to reintegrate and reunify the country in the face of the militant but limited opposition to this aim, the two "entities" will be pulled steadily in the direction of their respective patron-states, Serbia and Croatia, leaving behind a phantom Bosnia capable -- like the Madonna at Medugorje -- of appearing rarely to a handful of true believers, but seldom if at all to anyone else.

Some cynics say that this is secretly what the Muslims want. Before the war they made up a plurality of Bosnia's 4.3-million population (44 per cent), and, it is argued, whatever their losses they are still numerous enough to carve out a viable territory about the size of Sardinia somewhere in the center of the country. The raison d'etre of this rump state would be Islam.

Traveling around central Bosnia I came across little to support such claims. It is true that here as everywhere in the Federation, you find some areas under Muslim military and administrative authority, and others controlled by Croats, but almost none run jointly. In that sense, the Federation is still a dead letter. On the other hand, since these are often towns or villages side by side (or even districts in the same town), and since the overall level of intermingling among Muslims and Croats is high, the U.S. should not write the project off. Paradoxically, this is a favorite refrain of propagandists in the Serb Republic -- even though it is precisely the Muslims' continuing tolerance toward Bosnia's third constituent nation, the Serbs, that causes some Croats to be suspicious of Muslims.

For tolerance today in Muslim-run Bosnia, look at Travnik. Though it was once the seal of the Ottoman viziers and was turned during the war into one large, and heavily bombarded, refugee center, the town's Serbian Orthodox church still stands and its graveyard is well tended. Also well cared for is the imposing nineteenth-century school constructed by Jesuits.

But Travnik is best known as the birthplace of Ivo Andric, the Nobel Prize-winning novelist. Though often portrayed as the most quintessentially "Bosnian" of writers, Andric was in truth sneering about his native town and people, and especially hostile toward anything remotely Muslim. There is, therefore a nice irony in the way that his home has now been turned into the Club Divan, where they serve excellent grilled lamb but strictly no alcohol.

This Islamic prohibition is still little observed in Bosnia. The reflex response, indeed, of many members of the governing Party of Democratic Action, when you ask them whether the war has made them less "Bosnian" and more Muslim, is to bring out a bottle of brandy. But it is true that many more women wear headscarves, and many more men are bearded, than used to be so. True, too, that throughout the country mosques and minarets are being rebuilt with Saudi and other Arab money.

On the other hand, this outside investment may serve as a centripetal force, binding the country back together. The problem the Croats face in "their" zones of the Federation is a demographic one: too much land, too few Croats. As for the Serb Republic, one glance at its peculiar shape -- like a pair of compasses -- is enough to see that it's not economically viable, especially as the industrial area round Banja Luka is also the most under threat of being cut off from Serbia.

But isn't religion likely to strengthen as a dividing factor over time? Not according to the Mufti of Mostar. Sitting in the cobbled courtyard of the recently repaired Mehmed Pasha mosque on the banks of the river Neretva, he turns the question around: "If people take their cross to kill each other, that's not religion. If Bosnians were more religious, there wouldn't have been -- won't be -- war."